Ok - I was playing around in the stock market with some spare change. I bought a few hundred shared in company X. It now looks like company X is going to be sold/bought out.

What happens to my shares? Do I have to sell them? At what price? Am I going to lose money?

Any information would be appreciated. Its not much money and my first venture into self-investing, but I am curious what my best plan of attack should be.

The acquired company's shares should convert to shares of the acquiring company. If it is a major company, it should be seemless. If it is a small company that is barely listed, you may need to enlist the services of a stock broker to convert your shares.

This is one of a number of reasons a lot of people just buy low-cost, diversified mutual funds like Vanguard's 500 Index Fund or Total Stock Market Index Fund. You just put in money and everything else is taken care of. Although I play around with some stocks for fun, all my retirement funds are in Vanguard's Total Stock Market Index Fund. It's a one-stop shop.

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Originally Posted by FrankK

The acquired company's shares should convert to shares of the acquiring company. If it is a major company, it should be seemless. If it is a small company that is barely listed, you may need to enlist the services of a stock broker to convert your shares.

This is one of a number of reasons a lot of people just buy low-cost, diversified mutual funds like Vanguard's 500 Index Fund or Total Stock Market Index Fund. You just put in money and everything else is taken care of. Although I play around with some stocks for fun, all my retirement funds are in Vanguard's Total Stock Market Index Fund. It's a one-stop shop.

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Yeah - any real money is managed by a professional (Fidelity in my case). This was just me goofing around with a few hundred bucks and a ShareBuilder account.

When a company is taken over, either the buyer gives cash or cash and stock for the shares of the company to be bought. Usually, the broker will send out a request to the owner, yourself, that asks if you wish to tender your shares. They will explain how much is being given for your shares and you can decide what to do. If you tell your broker you wish to tender your shares, then you lose control of the shares until the takeover occcurs. If you choose not to tender, you can sell your shares on the open market at whatever you can get by either putting in an order at market or with a limit price. Most buyouts are higher than people originally paid for the shares, so the owners make money. That is not always true however. The only way you can find out is to get a stock quote on the company that you own. That will tell you whether you will make or lose money on the transaction.

amdeist, you are aware you keep yanking up old threads? If you going down to the bottom to "similar threads," you've got to watch the dates as it'll pull up everything from current to really, really old.